Question
Dains Diamond Bit Drilling purchased the following assets this year. Asset Purchase Date Original Basis Drill bits (5-year) February 8 $ 110,000 Drill bits (5-year)
Dains Diamond Bit Drilling purchased the following assets this year.
Asset Purchase Date Original Basis
Drill bits (5-year) February 8 $ 110,000
Drill bits (5-year) July 2 111,250
Commercial building April 27 363,000
Assume its taxable income for the year was $70,000 before deducting any 179 expense (assume no bonus depreciation but assume that the 2014 179 limits are extended to 2015). (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
a. What is the maximum amount of 179 expense Dain may deduct for the year?
b. | What is Dains maximum depreciation expense for the year (including 179 expense)?
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